| Thomas Cook and debt.... 07:26 - Sep 24 with 1315 views | BanksterDebtSlave |
"Thomas Cook only narrowly survived a near-death experience in 2011. Its debt pile had already reached £1.1bn, and it stayed afloat only after an emergency additional cash injection - but it also meant even more debt to service.
Since 2011 Thomas Cook has paid out £1.2bn in interest, which meant that more than a quarter of the money it charged for the 11m holidays it sold every year went into the pockets of lenders."
......nice work if you can get it. This is money that was being thrown at banks at about 0% by the way. Anybody know how much of the original £1.1Bn is still owed after paying out £1.2Bn?
Edit....
"But one factor towers above others: the huge pile of debt — £1.7bn at the last count — that the tour operator has been attempting to shoulder for the past decade."
 "It paid £124m in interest charges to its lenders last year, far more than it could spend on investment."
"The blame game is in full swing. Some Thomas Cook officials suspect lenders, led by Royal Bank of Scotland and Lloyds Banking Group, were never committed to the financial rescue package, and were instead trying to prolong talks in the hope the government would offer backstop funding and thereby improve the position of creditors.
The evidence for that theory seems to be spiralling value of the proposed package — it started at £750m in a recapitalisation backed by Chinese firm Fosum, Thomas Cook’s biggest shareholder; then it became £900m; then £1.1bn."
[Post edited 24 Sep 2019 7:52]
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| Thomas Cook and debt.... on 08:09 - Sep 24 with 1237 views | Coastalblue |
Isn't it just another old and established company that has been left behind by the changing nature of the way people consume things?
Adapt or die, it's like natural selection in industry, people don't buy holidays like they used to in the 70's and 80's any more in the numbers required, TC didn't seem to be able to adapt to that. |  |
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| Thomas Cook and debt.... on 08:11 - Sep 24 with 1229 views | homer_123 |
It has indeed had way too much debt for too long. |  |
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| Thomas Cook and debt.... on 08:20 - Sep 24 with 1211 views | ElephantintheRoom |
What is debt to one accountant is profit to another and allows the TC directors to trouser £20 million in bonuses for the way they ran the company since 2011. Despite the Spanish and Turkish Government guaranteeing money the British Government refused to act as a guarantor and the company collapsed owing a lot of money to Johnny Foreigner Hotel owners which doesnt really matter. Any relation between the Tory government and the Tory minister who runs one of the hedge funds that made £200 million for the collapse is purely coincidental. |  |
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| Thomas Cook and debt.... on 08:24 - Sep 24 with 1196 views | footers |
| Thomas Cook and debt.... on 08:20 - Sep 24 by ElephantintheRoom |
What is debt to one accountant is profit to another and allows the TC directors to trouser £20 million in bonuses for the way they ran the company since 2011. Despite the Spanish and Turkish Government guaranteeing money the British Government refused to act as a guarantor and the company collapsed owing a lot of money to Johnny Foreigner Hotel owners which doesnt really matter. Any relation between the Tory government and the Tory minister who runs one of the hedge funds that made £200 million for the collapse is purely coincidental. |
They were obviously Thomas Cooking the books. |  |
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| Thomas Cook and debt.... on 08:25 - Sep 24 with 1196 views | BanksterDebtSlave |
| Thomas Cook and debt.... on 08:09 - Sep 24 by Coastalblue |
Isn't it just another old and established company that has been left behind by the changing nature of the way people consume things?
Adapt or die, it's like natural selection in industry, people don't buy holidays like they used to in the 70's and 80's any more in the numbers required, TC didn't seem to be able to adapt to that. |
They sold 11 million packages last year. | |
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| Thomas Cook and debt.... on 09:29 - Sep 24 with 1126 views | Guthrum |
| Thomas Cook and debt.... on 08:09 - Sep 24 by Coastalblue |
Isn't it just another old and established company that has been left behind by the changing nature of the way people consume things?
Adapt or die, it's like natural selection in industry, people don't buy holidays like they used to in the 70's and 80's any more in the numbers required, TC didn't seem to be able to adapt to that. |
That has been part of the problem, the pressure upon companies to "grow" and "diversify". Often unwisely, moving into markets outside their core business, or abroad where they face established competitors. Sometimes buying other companies which turn out to be unprofitable or hard to integrate. All fuelled by cheap borrowing before 2008 (the credit boom which was supposedly going to last for ever).
It's not that the basic trading model is terribly flawed. Turnover was high and they were at least breaking even (before restructuring costs) in challenging conditions. But due to the indebtedness (and the expensive restructuring/planning - £123m worth, including IT systems which were developed, then not used*), they hadn't the reserves to sustain cash flow when the investors turned off the taps.
* This is not insider knowlege, it's all in the 2018 Annual Report. https://www.thomascookgroup.com/investors/insight_external_assest/Thomas_Cook_AR |  |
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| Thomas Cook and debt.... on 09:39 - Sep 24 with 1090 views | hampstead_blue |
"The blame game is in full swing. Some Thomas Cook officials suspect lenders, led by Royal Bank of Scotland and Lloyds Banking Group, were never committed to the financial rescue package, and were instead trying to prolong talks in the hope the government would offer backstop funding and thereby improve the position of creditors.
The evidence for that theory seems to be spiralling value of the proposed package — it started at £750m in a recapitalisation backed by Chinese firm Fosum, Thomas Cook’s biggest shareholder; then it became £900m; then £1.1bn."
Great point.
This is why the Gov should not act as lender of last resort.
Ok so they did with the banks but that was structural and they altered the regulation to try to prevent it happening again.
The Gov also let a steel firm fail in the North East last year.
I do think the top Exec pay has gone bonkers. It should be about longer term performance rather than short term (and very risky) strategies.
TC were badly run.
There |  |
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Those who assume and insist they know are daft and in denial.
Those who assume, insist, and deny the truth are plain stupid.
Those who assume, insist, deny the truth and tell YOU they know you (when they don't) have an IQ in the range of 35-49.
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| Thomas Cook and debt.... on 09:43 - Sep 24 with 1071 views | StokieBlue |
| Thomas Cook and debt.... on 09:29 - Sep 24 by Guthrum |
That has been part of the problem, the pressure upon companies to "grow" and "diversify". Often unwisely, moving into markets outside their core business, or abroad where they face established competitors. Sometimes buying other companies which turn out to be unprofitable or hard to integrate. All fuelled by cheap borrowing before 2008 (the credit boom which was supposedly going to last for ever).
It's not that the basic trading model is terribly flawed. Turnover was high and they were at least breaking even (before restructuring costs) in challenging conditions. But due to the indebtedness (and the expensive restructuring/planning - £123m worth, including IT systems which were developed, then not used*), they hadn't the reserves to sustain cash flow when the investors turned off the taps.
* This is not insider knowlege, it's all in the 2018 Annual Report. https://www.thomascookgroup.com/investors/insight_external_assest/Thomas_Cook_AR |
Also not a brilliant idea to issue bonds @ 6.25% in EUR when your primary cash flows are in GBP.
http://www.berliner-boerse.com/index.php/Bonds?isin=XS1531306717
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| Thomas Cook and debt.... on 09:56 - Sep 24 with 1043 views | Guthrum |
But the pound is quite strong against ... oh. | |
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| Thomas Cook and debt.... on 10:07 - Sep 24 with 1032 views | Guthrum |
| Thomas Cook and debt.... on 09:39 - Sep 24 by hampstead_blue |
"The blame game is in full swing. Some Thomas Cook officials suspect lenders, led by Royal Bank of Scotland and Lloyds Banking Group, were never committed to the financial rescue package, and were instead trying to prolong talks in the hope the government would offer backstop funding and thereby improve the position of creditors.
The evidence for that theory seems to be spiralling value of the proposed package — it started at £750m in a recapitalisation backed by Chinese firm Fosum, Thomas Cook’s biggest shareholder; then it became £900m; then £1.1bn."
Great point.
This is why the Gov should not act as lender of last resort.
Ok so they did with the banks but that was structural and they altered the regulation to try to prevent it happening again.
The Gov also let a steel firm fail in the North East last year.
I do think the top Exec pay has gone bonkers. It should be about longer term performance rather than short term (and very risky) strategies.
TC were badly run.
There |
That is one problem, as with the court case in Germany (tho what they were doing there may turn out to have been illegal). Investment firms will try to hoover up every penny available* and are not averse to collecting handouts of public money in the process.
The Stock Exchange, originally conceived as a method of financing trade and business, has become a derivative-ridden gambling den. Needs more regulation.
* Can't entirely blame them, they have pension and savings funds to support, with returns on investment currently quite dubious. | |
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